Previously Established Legal Reserve Sufficient to Fully Cover Cost
of Settlements
BOSTON--(BUSINESS WIRE)--
State Street Corporation (NYSE: STT) today announced that it has entered
into settlements with the Securities and Exchange Commission (SEC), the
Massachusetts Attorney General and the Massachusetts Securities Division
of the Office of the Secretary of State to resolve their investigations
into losses incurred by and disclosures made around certain active
fixed-income strategies managed by State Street Global Advisors (SSgA)
during 2007 and earlier periods. In reaching these settlements, State
Street has not admitted or denied the allegations made by the regulators.
Under the terms of the agreement with the SEC, State Street has agreed
to establish a $313 million fair fund, which includes a fine of $50
million and disgorgement of advisory fees and interest of approximately
$8 million. Combined with the approximately $350 million in prior client
settlements, the total compensation to investors will be approximately
$663 million. The allocation of the payments from the fair fund to
former investors in the active fixed-income funds has been agreed upon
with the SEC. Under the settlements with the Commonwealth of
Massachusetts, State Street has agreed to pay $10 million to each of the
Massachusetts Secretary of State and the Massachusetts Attorney General.
State Street's previously established legal reserve will fully cover the
cost of the settlements.
Ronald E. Logue, State Street's chairman and chief executive officer
said, "We value our reputation as a trusted fiduciary to institutions
around the world and we recognize the critical importance of fulfilling
our fiduciary obligations. As such, we were determined to work with our
regulators and with our customers to resolve their concerns around
investments in certain of SSgA's active fixed-income strategies in 2007.
We remain committed to building on SSgA's comprehensive organizational
and infrastructure changes implemented over the past 24 months to ensure
that our practices not only meet but exceed industry standards."
About State Street Corporation
State Street Corporation (NYSE: STT) is one of the world's leading
providers of financial services to institutional investors including
investment servicing, investment management and investment research and
trading. With $18.8 trillion in assets under custody and administration
and $1.9 trillion in assets under management at December 31, 2009, State
Street operates in 25 countries and more than 100 geographic markets
worldwide. For more information, visit State Street's web site at www.statestreet.com.
Source: State Street Corporation
Contact: State Street Corporation
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